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Monthly Economic and Financial Developments, August 2008

Published: Wednesday October 1st, 2008

Initial data for August highlighted continued moderation in the economic momentum, reflecting a slowdown in the expansion of consumer demand, tempered construction activity and sustained weakness in the tourism sector. Buoyed by a contraction in private sector credit growth, along with public sector borrowings, liquidity conditions improved during the period, and external reserve levels stabilized.

Tourism statistics for the first half of the year showed a 2.2% contraction in arrivals to 2.37 million, vis-á-vis the same period a year ago. This development reflected a 3.8% reduction in sea passengers, which outpaced the 1.1% improvement in air traffic. A breakdown of tourist arrivals by port of entry revealed that both New Providence and Grand Bahama experienced declines in visitors of 5.9% and 14.7%, respectively; whereas arrivals to the Family of Islands strengthened by 11.7%.

Average consumer prices for the 12-month period ending July increased to 3.29% from 2.42% in the corresponding period of 2007 and 1.58% in 2006. The most significant price gains were noted for furniture & household operations (7.23%), medical care (4.80%), food & beverage (4.24%), other goods & services (3.83%) and transportation & communication (3.42%); and the remaining components advanced by less than 3.0%. As to retail fuel costs, despite a reduction in international oil prices during the period, diesel prices advanced by 0.82% to $6.12 per gallon, while the average cost of gasoline decreased by 1.0% to $5.68 per gallon at end-August.

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